Each year, ExxonMobil publishes its view of the long-term trends of worldwide economic growth and energy demand: The Outlook for Energy. In the newly-released 2005 version, the energy giant’s basic conclusion—that through the year 2030, traditional fossil fuels will continue to supply the vast majority of energy needs—remains the same, although the mix and sources are adjusted slightly.

ExxonMobil’s forecast of energy demand in 2030—about 335 million barrels of oil equivalent per day (MBDOE), an increase of 60%—remains consistent with its estimate last year. However, ExxonMobil sees the growth in oil demand slowing slightly, based largely on the impact of higher oil prices and an increasing focus on vehicle fuel efficiency.

The company predicts global demand for oil increasing at 1.4% per year—down from its prior estimate of 1.5% per year.

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The largest fuel share today and in 2030 is oil. Oil demand in OECD countries should peak in about 20 years, in ExxonMobil’s analysis, due to increases in the fuel economy of personal vehicles. However, in the non-OECD countries, the company sees oil demand continuing to increase in all end uses, although transportation is by far the largest growth segment. Fuel demand for cars and trucks will drive total oil demand growth at a rate of 2.5% per year. By 2030, non-OECD oil demand will be well in excess of that in the OECD countries.

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ExxonMobil sees signs of vehicle saturation in most developed countries in North America and Europe, predicting annual growth rates in the 1% range. In Asia Pacific, however, the fleet is expected to nearly quadruple.

By 2030, ExxonMobil expects to see hybrids (yellow) in North America constituting approximately 10% of the fleet, with hybrids approaching 30% of all new vehicle sales in the United States and Canada. European hybrids supplement the already high share of diesel. Hybrids in Asia Pacific are mainly in the OECD countries (Japan, the Republic of Korea, Australia and New Zealand).

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The company expects what it characterizes as significant improvement in the basic efficiency of new cars, as well as growth in the numbers of hybrid and diesel vehicles, thereby reducing the impact that a larger number of vehicles will have on fuel demand.

ExxonMobil estimates that North American fuel demand for light duty vehicles will likely remain the same in 2030 as it was in 2000 due to efficiencies and growth in the number of hybrids on the road. (That will certainly factor in to any decisions made on increasing refinery capacity.) In Europe, light duty fuel demand should decline by 2030. While the Asia Pacific fleet quadruples in size, the company is expecting efficiency and favorable changes in fleet mix will to hold fuels growth to about triple 2000 levels.

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That all still leaves at issue the question of oil supply. ExxonMobil is estimating a plateau in non-OPEC oil production (factoring in all sources, including oil sands, Gas-to-Liquids production and other unconventional sources such as shale and Coal-to-Liquids) starting at around 2020. (This also appears to be an advance in the estimated date of peak production, as in last year’s version, the supply of non-OPEC oil was still increasing slightly up to 2030.

That falls far short of the global need, the remainder of which falls to the OPEC countries to provide. The current estimate of this call on OPEC is reduced from last year’s estimate by 3 million barrels per day (6%) in 2030. The reduction is based on the slight decline in oil demand growth over the next 25 years and the slightly increased availability of other sources of non-OPEC oil.

That still leaves OPEC with a very hefty obligation: 37 million barrels per day in 2020 and 47 million barrels per day in 2030. The OPEC countries, inclusive of Iraq, currently produce approximately 30 million barrels per day.

Comments

OPEC may not want to pump that much even if they can, because lower production means higher prices and probably better revenue. The only thing that would make them want to ramp up is if some alternative looked like it would undercut them.

The report is a joke. Not dissimilar to the EIA International Energy Outlook 2001 which was wildly optimistic about some non-OPEC provinces about which it has subsequently been show to be completely wrong:Energy Information Administration Forecast

Or the UK government aviation white paper from Dec 03 which predicts a doubling in air traffic by 2030... a forecast based on indefinitely stabilised oil prices at $25:Aviation White Paper Disaster

These kind of reports are hopelessly optimistic, come on where is OPEC going to find an additional 17mbpd, pumping an extra 300bn barrels over the next 25 years with rates as high as 47mbpd? It's so detached from reality one doesn't know how to even address it.

Exxon has not done any analysis on OPEC (how could they the books are closed). They only have a global demand model, some optimistic non-OPEC projections and then just use the OPEC fudge factor to make it all add up.

The single key, not stated, assumption in this analysis is the price of oil or energy is constant. This assumption results in prediction of demand or consumption with a fixed price per barrel and no inflation.

What is needed is a prediction of price increases and demand destruction that will result in consumption being equal to production.

But, you will not see ExxonMobil being the bearer of bad news to the public. Thus you see the rosey view analysis presented. You can be sure that internal ExxonMobil reports will have projections of price increases that result in demand destruction sith consumption equalling production. These reports will not be released to the masses.

Assuming only 50% hybrids by 2020 requires that there is no accelerated retirement of uneconomical vehicles, and that the hybrids don't out-last the conventional cars. If the market trends and repair record of the Prius are any indication, both of those assumptions are likely to be wrong.

The running assumption we hear all the time about how long it will take to replace a significant portion of the US vehicle fleet is, by definition, based on conditions completely unlike the unchartered waters we're headed into. Look at the last few months and how quickly US consumers turned away from SUV's to more economical vehicles, including hybrids. And that was before we saw what I would consider truly high gasoline prices in the US (over $5/gallon sustained for at least 3 months).

"Assuming only 50% hybrids by 2020 requires that there is no accelerated retirement of uneconomical vehicles, and that the hybrids don't out-last the conventional cars. If the market trends and repair record of the Prius are any indication, both of those assumptions are likely to be wrong."

Regardless, the 50% figure is derived from the assumption that *every* obsolete vehicle is superceeded by a hybrid. To borrow your turn of phrase, this assumption is 'likely to be wrong'.

The report fails to account for the possibility of much larger use of nuclear power. It also vastly understates the use of hybrids.
It also overstates overall demand increases and most of the economic growth assumption are straight-line. It's basically a SWAG.

The report properly shows that energy 'intensity' is improving, that is all countries, OECD and non-OECD will use energy more efficiently. It is interesting that US/North America fuel uses increases to 2020 then *goes down*... hmmm. Europe oil usage is already flat/declining. But Asia / non OECD skyrockets.

"If Exxon is right, which I doubt, we are truly screwed."

Hardly. This looks like the scenario that imagines $25/barrel oil as far as the eye can see. If oil is above $40/barrel, the demand growth will be much less. This is just a recognition of reality that non-OECD growth will be the driver of increased oil demand, as OECD oil use flattens out, and that demand will be highly economically sensitive.

Last point: the "call on OPEC" is 37 mbd by 2020.
THIS IS ACTUALLY QUITE CONSERVATIVE, as OPEC has capacity today of a bit over 30 mbd, the Saudis promise that they can go from 10 mbd now to 15 mbd by 2015, and Iraq is under 1.5 mbd, and could potentially by 4-5 mbd in ~10 yrs once the country stabilizes. Add Nigeria increases, Libya, which is underproducing,
and you easily have abiliy for OPEC to produce 37-40 mbd by 2015.

I think the main thing wrong is that it overestimates demand, as fuel efficiency and alternatives will move us away from oil.
In particular, discounting nuclear power, which will grow far more than they estimate.